Indonesian family business leaders succession navigation

• Main Author: Salim, Linda
• Format: Thesis
• Language: English; English; English
• Published: 2019
• Subjects: HF5001-6182 Business
• Online Access: https://etd.uum.edu.my/9243/1/s95058_01.pdf; https://etd.uum.edu.my/9243/2/s95058_02.pdf; https://etd.uum.edu.my/9243/3/s95058_references.docx; https://etd.uum.edu.my/9243/
• Institution: Universiti Utara Malaysia

Sustainability in family business does not only serve economic purpose, it also serves as the glue to keep the family intact. The purpose of this study is to detail how family business leaders navigate intergenerational succession. Assuming Stewardship Theory, both leaders and successors have the same goal to maintain the family and the business. In the past, family business is thought to be unprofessional and unsustainable until management is professionalized. Recent study, however, revealed that management incompetence does not impact family business sustainability. This study uses multiple case studies with purposive sampling in Indonesia context. Participants are family business leaders with mixed profiles in the middle of succession. All participants manage family businesses above medium enterprise level, according to the Indonesian law, because it is more customary to replicate small and medium businesses, rather than aiming for succession. Findings from this study reveals that attitude toward conflict and benevolence of the participants highly influence their confidence in the succession process, which promotes the completion of succession process and ease of the process. In addition, this study looks into business goal integration into family goals and early grooming, to examine if succession plan is a prerequisite for sustainability. The finding challenges both the synchronization of family and business goals, as well as early grooming, as prerequisites to successful in family business succession. This study then sheds a light on power struggle and fear of uncertainty that influence participants’ confidence in succession process. Findings from this study helps family business stakeholders understand how leaders navigate intergenerational successions on their own terms, while understanding their emotional struggles during transition. Future research direction include further look into how benevolence and paternalism influence sustainability of a family business, as well as the unique family and power dynamic in business-owning families.